International Monetary Fund or IMF has stated in a latest update that global economic growth has remained persistently subdued since the COVID-19 pandemic, with growth in labor productivity having slowed in about 70% of economies. Compounding this challenge are substantial strains on public finances, driven by elevated and rising debt levels, as well as increased demands for spending on defense, aging populations, and economic development. In addition, low-income developing countries are bracing for a reduction in foreign aid.

IMF noted that this constrained fiscal environment demands that governments deliver greater value for money and strategically adjust expenditures to support economic growth. Revitalizing growth not only improves living standards but also eases fiscal pressures by increasing public revenues and making public debt more sustainable, thereby creating additional space for other priority spending. Although public spending serves many objectives-such as providing public goods, ensuring a fair distribution of income, and stabilizing economic cycles. The current context underscores the need to prioritize policies that reinvigorate economic growth and mitigate fiscal risks.

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